The Rick Scott job-creation myth

His policies have had no effect on job growth, while Florida’s poor are worse off than ever.

click to enlarge Governor-elect Rick Scott at a press conference in Fort Lauderdale last November. - Photo by Shealah Craighead
Photo by Shealah Craighead
Governor-elect Rick Scott at a press conference in Fort Lauderdale last November.

When Rick Scott ran for governor, he vowed to cut state government, corporate income taxes and business regulations. As a result, he promised, Florida would become a corporate-friendly state that would attract new companies and new jobs.

"We're going to run this state like a business," Rick Scott told supporters in Panama City in October 2010. As his first year in office came to a close last month, he cited a decline in unemployment rate and rising job growth as evidence his policies are working.

A Florida Center for Investigative Reporting examination of data reveals that the Scott administration's claims of success are premature, even inaccurate.

According to federal and state labor statistics, government and academic studies, economic forecasts, and interviews with economic analysts — information that has not been widely reported — FCIR has found there's no evidence Scott's policies are responsible for any of the new jobs in Florida over the past year. What's more, this data also shows that Scott has not only not helped the Floridians most in need of help — the state's poorest residents — he has made their lives demonstrably worse.

Playing the numbers

Rick Scott, who had never held public office before, ran on the promise that he would create 700,000 jobs over seven years above what was forecast. He's since backed away from that claim, saying he really meant he would create a flat 700,000 jobs — all jobs state economists had already predicted would be created. Scott is also taking credit for what he says is an improving job market in Florida. "We've had plenty of success so far," he told supporters recently, referring to a drop in unemployment.

"It appears Florida is on the right track," Scott's press secretary Lane Wright wrote in a Dec. 14, 2011, email. "Though the nation's unemployment rate has remained virtually flat (dropping from 9.1 to 9.0), Florida's unemployment rate has dropped from 12 percent before Gov. Scott took office to 10.3 percent as of October. We've created more than 118,000 private sector jobs. If you account for losses in the public sector, we're still more than 106,000 net positive."

(Since Wright wrote those comments, the federal unemployment rate has dropped to 8.6 percent, and Florida's dropped to 10 percent. The governor released a year-end statement saying: "Florida has gained 120,000 private sector jobs.")

But those unemployment numbers, released by the U.S. Department of Labor's Bureau of Labor Statistics, only tell part of the story.

They don't reflect "discouraged workers," people who have not actively sought employment in the previous four weeks, or the underemployed, people who gave up looking for full-time jobs and took part-time jobs instead, or those who have gone back to school.

Florida's rate for all of these categories together, according to federal calculations, is 18.2 percent — the eighth highest in the country. That's lower than 2010's 19 percent, but less of a decline than the unemployment rate that Scott cites.

The labor force (the number of people with jobs or looking for jobs) has shrunk by 41,000 people between November 2010 and November 2011, according to the state's Department of Business Opportunity.

Unemployment looks like it is declining more than it is because as people drop out of the job hunt, fewer are being counted. "It creates a bias so that it looks like things are getting better, but the labor force is just shrinking," says Sean Snaith, an economics professor at the University of Central Florida in Orlando and director of the nonpartisan Institute for Economic Competitiveness.

For the economy to recover, Snaith adds, three things need to happen at the same time: payroll has to grow, unemployment levels have to decline, and the labor force has to increase. "We haven't had all those things lining up," he says.

Not his jobs

Meanwhile, what growth there is has been generated in low-paying jobs, such as in the tourism industry. From July 2010 to July 2011, the largest number of new jobs created in the state came in the leisure and hospitality industry, which pays average annual wages of $21,448. That compares to $41,750 for all Florida industries, according to statistics from the state's Agency for Workforce Innovation.

Along with hotel workers, Florida's job-creation machine is also making administration and waste management services — with jobs such as secretaries, office administrators, janitors and office cleaners — one of the three fastest-growing industries, according to the "State of Working Florida," a study published in September by Florida International University's Research Institute on Social and Economic Policy in Miami. Between January and July 2011, the state added about 14,000 of these jobs. Meanwhile, jobs with benefits in higher-paying industries such as information, finance and insurance, wholesale trade, along with federal, state and local government, all saw negative growth.

And the surge in tourism and cleaning jobs doesn't mean those workers are getting paid any better. The bottom 20 percent of earners in Florida have seen their wages actually drop, according to the FIU study, while they went up modestly for the state's top 20 percent of earners.

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